All the Numbers

RRIFs and the wind-up at 71

From the All the Numbers wiki · Retirement and benefits

An RRSP cannot be held past the end of the year you turn 71. It converts to a RRIF (or an annuity), and from the following year a minimum withdrawal is compulsory. A RRIF can be opened earlier. By default All the Numbers opens it in January of the year its owner turns 65, or of the year they retire if that is later.[1] From then, a RRIF payment is pension income: it can be split with a spouse and it earns the pension credit, while an RRSP withdrawal does neither. If you take only the minimums, or still earn a salary then, it converts in December of the year you turn 71, the latest the law allows.[2]

Drawing it down before 72

From the year the RRIF opens to the year you turn 71, each December it pays out what brings your taxable income up to the top of the lowest federal tax bracket.[3] Those years often have little other income, so that money is taxed at the lowest rate instead of piling up into larger minimums later. No government or PWL source sets a rule for this; it is the moderate one of the Calm Money Coach's four scenarios. Most Canadians take only the minimum, and PWL found little difference in value between the approaches. No extra payment is made in a year the GIS is paid, because the GIS is based on the previous year's income and the payment would cut it.

The formula

The minimum is a prescribed factor times the balance on January 1:

minimum = factor(age) × balance at January 1

The factors are the CRA's own table, listed with their source on the Sources page.[4] They rise with age — which means the tax on a large RRIF rises with age too, whether or not the money is needed.

The table starts at 71. A RRIF opened earlier uses a formula instead: 1 divided by (90 minus age), applied to the January 1 value. From 95 the factor is 20%.[5] A RRIF All the Numbers opens at 65 uses the formula until it reaches the table.

What the engine does

  • Converts an RRSP to a RRIF at 65 (or retirement), or at the end of the year the owner turns 71, once its owner's birth year is known. An owner already past 71 is taken to hold a RRIF opened before the plan.[2] This is one of the retirement-age conventions.
  • Pays the minimum in monthly payments, as most RRIF holders set it up. Each payment is the part of the year's minimum still unpaid, spread over the months left, so December pays the rest. A month's withdrawal for spending includes that month's payment. The law sets only the yearly total; when it is paid is the holder's choice.[6]
  • Forces the minimum out each year afterwards and taxes it as income at the owner's rate, net of the pension income amount (a RRIF payment at 65+ is eligible pension income: $2,000 federally,[7] $1,796 in Ontario[8] for 2026) and of the age amount the extra income phases out.[9]
  • Counts the withdrawal as income for the Guaranteed Income Supplement test the following year, and for the OAS recovery tax in the same year.
  • Warns at the conversion, because it changes the shape of every later year.

What it deliberately does not

Without a birth year on the account there is no age, so no conversion and no minimums. A plan that runs past 71 with no birth year is therefore optimistic, and the account editor says so where you enter it.

See also: workplace pensions, pension income splitting, Old Age Security.

See also

  • Old Age Security · A monthly pension paid to most Canadians from 65, based on years lived in Canada after 18. It can be deferred for a permanent increase, rises 10% at 75 and is partly repaid through a recovery tax at high incomes.
  • Pension income splitting · Spouses can jointly elect to move up to half of one partner's eligible pension income onto the other's return, lowering combined tax when incomes are uneven. CPP and OAS are not eligible.
  • Retirement age · The age at which a person's pay stops in the plan, 65 unless you give another. Their monthly contributions stop then, and an RRSP becomes a RRIF at 71.
  • RRSP room, deduction and withdrawals · Room accrues at 18% of earned income up to the annual cap, contributions earn a deduction refunded the following April, and withdrawals are taxed as income. The plan assumes you start with no carried-forward room unless you say otherwise.
  • Tax on the final return · What the plan's last year would owe in tax if the household died then, and how much of the savings would be left after it.
  • Tax withheld from pay, and the April refund · Employers withhold income tax, CPP and EI from each paycheque as an estimate. The real tax is worked out on the return, and the difference arrives or is owed the following April.
  • The Guaranteed Income Supplement · A tax-free top-up to Old Age Security for pensioners with little other income. It falls by 50 cents for every dollar of other income (75 cents through part of the range); RRSP and RRIF withdrawals count against it, TFSA withdrawals do not. The projection estimates it on the previous year's income.
  • The OAS recovery tax · Years where net income clears the threshold repay 15% of the excess out of Old Age Security. The projection adds it to the year's return and pays it with the April balance; Service Canada takes it from the OAS payments from the next July instead, so only the timing differs.
  • The savings accounts at a glance · The TFSA, RRSP, FHSA, RESP, RRIF and non-registered account each have their own room, tax treatment and withdrawal rule. This page gives one short paragraph on each, with the entry that covers it in full.
  • Workplace pensions · A defined-benefit pension from an employer pays a set amount each month for life, sometimes with a bridge benefit that stops at 65. Enter the yearly pension you expect when it starts, with the years you will still work, under each person's workplace pension; the plan does not add one you have not entered.

References

  1. ↑Our convention; CRA — eligible pension income: at 65 or older, RRIF payments are eligible for the pension income amount and for splitting, an RRSP withdrawal is not · Unless the household takes only the minimums, an RRSP becomes a RRIF in January of the year its owner turns 65, or of the year they retire if later (the plan's first year for an owner already past it); an owner who still earns a salary at 71 converts at 71. Money paid into the RRSP after the RRIF opens moves over in December of the year they turn 71 · 65 years · effective 2026-10-28
  2. ↑CRA T4040 ch.5 (an RRSP matures by the end of the year you turn 71: withdraw it, buy an annuity or transfer it to a RRIF); ITA 146(2)(b.4) · With "take only the minimums", or for an owner still earning at 71, an RRSP moves in full to a RRIF in December of the year its owner turns 71 — the latest the law allows — and pays the RRIF minimum from the next year; an owner already past 71 is taken to hold a RRIF opened before the plan · 71 years · effective 2026-09-25
  3. ↑Our convention: the Calm Money Coach's decumulation planner, scenario "fill the low bracket"; CRA — federal tax rates and brackets · From the year a RRIF opens early to the year its owner turns 71, each December it pays, above its minimum, what brings the owner's taxable income before pension splitting up to the top of the lowest federal tax bracket for that year; nothing in a year the owner receives the GIS. The payment is withheld as a lump sum, and the cash goes where leftover cash goes · effective 2026-10-28
  4. ↑CRA — RRIF minimum payments; factors cross-checked digit-for-digit across four sources · RRIF minimum withdrawal factors (Budget 2015 schedule): entry age <=71 uses 1/(90-age); table 71-94; 20.00% applies at 95+. Secondary sources commonly typo 86 (8.99, not 9.01) and 89 (10.99, not 11.01) · See the source · effective 2015-01-01
  5. ↑Income Tax Regulations s.7308 · RRIF minimum below age 71 at January 1 is 1/(90 − age) of the January 1 fair market value; the prescribed-factor table applies from 71; 20% from 95 · See the source · effective 2015-01-01
  6. ↑Our convention; CRA T4040 ch.5: the minimum must be paid each year from the year after the RRIF is set up, and the holder chooses how often payments are made · A RRIF pays its minimum in monthly payments: each month the minimum still unpaid at the start of the month, divided by the months left in the year, less anything already withdrawn that month, so December pays the rest. A month's withdrawal for spending carries that month's payment, and the payments are spent before anything else is sold · effective 2026-10-20
  7. ↑CRA — TD1 2026 Personal Tax Credits Return, line 4; ITA 118(3), (7) · Federal pension income amount (line 31400): lesser of this and eligible pension income (RRIF, RPP, RRSP annuity payments at 65+; not CPP, OAS, GIS or lump-sum RRSP withdrawals); not indexed · $2,000 · effective 2006-01-01
  8. ↑CRA — TD1ON 2026 Ontario Personal Tax Credits Return, line 3 · Ontario pension income amount (ON428 line 58360): lesser of this and eligible pension income; indexed · $1,796 · effective 2026-01-01
  9. ↑CRA — Indexation adjustment for personal income tax and benefit amounts (2026); TD1 2026 line 3 · Federal age amount 2026 (line 30100): $9,208 for a filer 65+ at 31 December, reduced by 15% of net income over $46,432, nil at $107,819; credited at the lowest rate; indexed · See the source · effective 2026-01-01
  10. CRA — RRSP options when you turn 71 · An RRSP must mature (be withdrawn, annuitized or converted to a RRIF) by December 31 of the year the annuitant turns 71 · 71 years · effective 2007-01-01